Correlation Between Pardee Resources and Tejon Ranch
Can any of the company-specific risk be diversified away by investing in both Pardee Resources and Tejon Ranch at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pardee Resources and Tejon Ranch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pardee Resources Co and Tejon Ranch Co, you can compare the effects of market volatilities on Pardee Resources and Tejon Ranch and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pardee Resources with a short position of Tejon Ranch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pardee Resources and Tejon Ranch.
Diversification Opportunities for Pardee Resources and Tejon Ranch
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pardee and Tejon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Pardee Resources Co and Tejon Ranch Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tejon Ranch and Pardee Resources is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pardee Resources Co are associated (or correlated) with Tejon Ranch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tejon Ranch has no effect on the direction of Pardee Resources i.e., Pardee Resources and Tejon Ranch go up and down completely randomly.
Pair Corralation between Pardee Resources and Tejon Ranch
Given the investment horizon of 90 days Pardee Resources Co is expected to generate 0.72 times more return on investment than Tejon Ranch. However, Pardee Resources Co is 1.38 times less risky than Tejon Ranch. It trades about 0.12 of its potential returns per unit of risk. Tejon Ranch Co is currently generating about -0.04 per unit of risk. If you would invest 25,474 in Pardee Resources Co on August 29, 2024 and sell it today you would earn a total of 5,526 from holding Pardee Resources Co or generate 21.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Pardee Resources Co vs. Tejon Ranch Co
Performance |
| Timeline |
| Pardee Resources |
| Tejon Ranch |
Pardee Resources and Tejon Ranch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pardee Resources and Tejon Ranch
The main advantage of trading using opposite Pardee Resources and Tejon Ranch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pardee Resources position performs unexpectedly, Tejon Ranch can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Tejon Ranch will offset losses from the drop in Tejon Ranch's long position.| Pardee Resources vs. Expro Group Holdings | Pardee Resources vs. ChampionX | Pardee Resources vs. Ranger Energy Services | Pardee Resources vs. Cactus Inc |
| Tejon Ranch vs. Steel Partners Holdings | Tejon Ranch vs. Compass Diversified | Tejon Ranch vs. Brookfield Business Partners | Tejon Ranch vs. Matthews International |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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